Wages are rising but still struggling to keep up with inflation, report shows

Research by jobs site Adzuna showed that average advertised salaries increased by 1.6% over the past six months compared with the current inflation rate of 2.9%.

The fall in retail sales is proof that workers and jobseekers are prioritising essential purchases, said the report.

The longer-term shrinking of average salaries is having a knock-on effect on home ownership, which is fuelling the wealth divide between rich and poor as the gap between wages and inflation widens, according to Adzuna.

Doug Monro, co-founder of Adzuna, said: "The fact that salary growth is making progress on a month-on-month basis as well as over a six-month period, shows the gap between wage growth and inflation may, slowly but surely, be closing.

"Although wage growth is nowhere near the desired pace, salaries are well and truly on the up. Despite the temporary economic lull having wider effects such as falling retail sales and flat-lining levels of home ownership, jobseekers and employees actually have more opportunities available now than ever.

"A strong labour market in the UK is the backbone to a productive and resilient post-Brexit economy. A pro-migration strategy is an essential part of Brexit negotiations for every sector of the British employment market.

"The flow of talented and skilled workers from the EU not only strengthens our labour force, but represents an investment in our future by helping us keep up with innovative ideas."